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Trojan Horse buried in Health Care Bill...New IRS Paperwork for You to fill out

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dave

Folks: You will see this Trojan-horse buried in Obama s Health Care bill. The trade or business scam of the IRS has been used for years to trap innocents

Message 1 of 9
, Oct 1, 2010

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Folks:

You will see this Trojan-horse buried in Obama’s Health Care
bill. The “trade or business” scam of the IRS has been used for years to trap
innocents into thinking they are “engaged in a trade or business”…..when in
reality very few fall under that category of territorial law.

Just wait till you have to fill out a 1099MISC for every
time you fork-over a grand total of $600 per year. It’s coming! Voting won’t
save you….but Nancy Reagan says JUST SAY NO
will.

(CNSNews.com)–
Millions of Americans who own rental property are in for a bit of a rude
awakening, beginning in January.

Congress has presented a bill to President Obama that would expand
the IRS Form 1099 reporting requirements set out in the health-care reform law
to include private citizens who own rental property.

The Patient Protection and Affordable Care Act, President
Obama’s health care law, requires
that small businesses file a Form 1099-MISC with the IRS for any goods they
purchase from an outside vendor valued at over $600.

But the new bill, the Small Business Jobs and Credit Act (H.R.
5297), extends the mandate to private individuals who own property from which
they receive rental income. Those people would also now have to fill out
paperwork reporting any expenditure they make on that property valued over $600
for the year.

Section 2101 of thebillaccomplishes
this by considering anyone receiving rental income as “engaged in a trade or business.”

The provision is a revenue-raising measure designed to offset
other small business tax incentives and the Small Business Lending Fund Program
created in the bill. It is expected to create about $2.5 billion in revenue,
according to the Joint Committee on Taxation, the nonpartisan body that
determines the budget effects of bills that Congress produces.

Ryan Ellis, tax policy director at the taxpayer advocate group
Americans for Tax Reform (ATR), told CNSNews.com that about 10 million
Americans are in for a rude awakening in just three months, when they have to
begin tracking all of their expenditures related to a rental property.

“There’s 10 million people who don’t know that they’re now
suddenly going to be required to do this,” Ellis said. “They don’t have to
issue them until January 2012 because it’s a 2011 requirement, but they’ve got
to start tracking in January (2011). So I hope their internal accounting is
good.”

Writing for ATR, Ellis said, “So imagine that you're renting out your starter condo.
You pay a property manager, a plumber, a repairman, a locksmith, a condo
association, etc. Imagine having to get a taxpayer identification number, order
1099-MISCs from the IRS, fill them out by hand, keep a copy for yourself, send
a copy to each payee (from whom you had to get a tax ID number and other
information), and then finally take your legitimate rental deduction. Then the
IRS finds some hiccup somewhere, and you get audited -- all to placate an
insane Congress.”

Repeal Fails

There has been opposition to making small businesses file 1099
statements since the original requirement was included in the health-care
bill. Much of the business community, including the U.S. Chamber of
Commerce, spoke out against the original requirements, valued by the
Joint Committee on Taxation at $17 billion, and the chorus in
favor of repeal grew so loud at one point that some Democrats began to support
repealing the provision.

When Senate Democrats introduced the small business bill,
several amendments were introduced to try to kill the original mandate on
small business -- and its expansion to private individuals contained in
the small business bill.

Ultimately, however, Senate Majority Leader Harry Reid (D-Nev.)
allowed the Senate to vote on only two amendments that would
change the 1099 requirements -- one Republican amendment, sponsored
by Sen. Mike Johanns (R-Neb.) that would have stripped the 1099 requirement
from law, and another supported by the White House that would have kept the
mandates on business and private property owners in place, but raised the
threshold for compliance from $600 to $5,000.

But both failed to gain approval, leaving the original mandate
from the health-care bill in place -- and the newly expanded 1099
burden contained in the small business bill.

“Americans are the most gullible people who ever existed in the
world because they tend to support their government instead of their
constitution . . .Americans are too gullible, too uneducated, and too
jingoistic to remain a free people”

Dr.
Roberts, former Assistant Secretary of the US Treasury…I’m sure upon
seeing all the tax returns Americans “voluntarily comply” to send in to his
IRS.

The question to be asked of SEC. 2101 is; Are you a person or an individual? If you re a person you payIf you re an individual you re exempted. SEC. 2101.

Message 2 of 9
, Oct 1, 2010

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The question to be asked of SEC. 2101 is;

Are you a person or an individual?

If you're a person you pay

If you're an individual you're exempted.

SEC. 2101. INFORMATION REPORTING FOR RENTAL PROPERTY

EXPENSE PAYMENTS.

(a) IN GENERAL.Section 6041 of the Internal Revenue Code

of 1986, as amended by section 9006 of the Patient Protection

and Affordable Care Act, is amended by redesignating subsections

(h) and (i) as subsections (i) and (j), respectively, and by inserting

after subsection (g) the following new subsection:

``(h) TREATMENT OF RENTAL PROPERTY EXPENSE PAYMENTS.

``(1) IN GENERAL.Solely for purposes of subsection (a)

and except as provided in paragraph (2), a person receiving

rental income from real estate shall be considered to be engaged

in a trade or business of renting property.

``(2) EXCEPTIONS.Paragraph (1) shall not apply to

``(A) any individual, including any individual who is

an active member of the uniformed services or an employee

of the intelligence community (as defined in section

121(d)(9)(C)(iv)), if substantially all rental income is derived

from renting the principal residence (within the meaning

of section 121) of such individual on a temporary basis,

``(B) any individual who receives rental income of not

more than the minimal amount, as determined under regulations

prescribed by the Secretary, and

``(C) any other individual for whom the requirements

of this section would cause hardship, as determined under

regulations prescribed by the Secretary.''.

(b) EFFECTIVE DATE.The amendments made by subsection

(a) shall apply to payments made after December 31, 2010.

gary2666@centurytel.net

It is not exactly true that if you claim to be an individual you are therefore exempt. There are additional qualifications given: The paragraphs state, any

Message 3 of 9
, Oct 3, 2010

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It is not exactly true that if you
claim to be an individual you are therefore exempt. There are additional
qualifications given: The paragraphs state, "any individual who...", or
"any other individual for whom...". If you qualify for these additional
requirements and are an individual, you are exempt. If you have several
rental properties, you might have a problem qualifying, even if you claim to be
an individual.

Even if it were true; The FEDS have no nexus / jurisdiction over a state citizen having failed to apply for a FEIN and receiving no conditional entitlements.

Message 4 of 9
, Oct 3, 2010

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Even if it were true; The FEDS have no nexus / jurisdiction over a state citizen having failed to apply for a FEIN and receiving no conditional entitlements.

John Hill

RE: If you qualify for these additional requirements and are an individual, you are exempt. If you have several rental properties, you might have a problem

Message 5 of 9
, Oct 3, 2010

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RE:

If you qualify for these additional
requirements and are an individual, you are exempt. If you have several
rental properties, you might have a problem qualifying, even if you claim to be
an individual.

The question to be asked of SEC. 2101 is;

Are you a person or an
individual?

If you're a person you
pay

If you're an individual
you're exempted.

REPLY:

Have we forgotten the basics of taxation?
An income tax is a tax on specified taxable ACTIVITY, a PRIVILEGE granted by
the government. (Rights granted by the Creator cannot be taxed as
"privilege").Income derived from "rental property" would be taxed under a
direct tax, not under an income tax. Unless the entity is a corporation. But
that also can be debated until the cows come home. ALWAYS CONSIDER the
SOURCE of the income! The point of this post is, let us not forget the
basics of taxation and confuse those who may be new to the group or just
getting their hands wet in trying to keep what is rightfully and lawfully
theirs from being confiscated by the Infernal Revenue Service. Income
tax- A tax on specified taxable ACTIVITY. Direct tax- A tax on property
and income derived from property, or a capitation.

Jake

The biggest problem is that people don t know how to conduct business, separate business from personal & are stuck in the possessive mindset. Think of little

Message 6 of 9
, Oct 3, 2010

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The biggest problem is that people don't know how to conduct business, separate business from personal & are stuck in the possessive mindset. Think of little children fighting over a toy - "mine - mine - mine !!"

I've worked with people who own rental properties for years & changes to IRS Regulations won't affect them personally because they're smart enough
to NOT have the rental property(ies) in their own name. Personal property in trusts over here, rental property(ies) in an S corp. managed by a CPA over there & you couldn't tie the business to the personal if your life depended on it.

There is no "one size fits all" way to do it, but when the given situation is analyzed & set up properly, there's no way the IRS can say these people are "engaged in a trade or business". And a properly operated S corp. pretty much expenses itself out - yes, it has to file tax forms / returns, but the CPA does all that & it has nothing to do with personal.

~ ~ ~

BOB GREGORY

*The definitions given below by John Hill are incorrect. It may be inferred that income tax is POSSIBLY a tax on an activity because the Supreme Court ruled

Message 7 of 9
, Oct 3, 2010

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The definitions given below by John Hill are incorrect. It may be inferred that income tax is POSSIBLY a tax on an activity because the Supreme Court ruled that it is an EXCISE. An excise can be applied to an ACTIVITY, an EVENT or to a PRIVILEGE.

About the only thing the 16th Amendment DID do was to allow taxation of income without regard to the source. Therefore income derived from rental of real estate is constitutionally taxable by an income tax. (The reason the 16th Amendment came about in the first place was to keep income from rental of real estate being considered a direct tax. See Pollock v. Farmers' Loan & Trust Co.,157 US 429 (1895))Congress already had the power to tax incomes, according to the Supreme Court. The real question is what IS income? The Supreme Court says that it is "corporate profit" as it determined in cases about the 1909 Corporation tax, and it continued to say that income means the same thing in all the income tax laws as it does/did in the 1909 law. It has further said that Congress cannot define or re-define income because the definition of "income" became a matter for the Supreme Court when the term was used in the 16th Amendment and became a part of the Constitution. Congress has tried to get around this ruling by defining "gross income" instead of "income."

The Supreme Court has also ruled that the right to work is a basic right which cannot be taxed. So if income tax is an excise, what activity, event or privilege does it tax?

This addition to the health care act and other changes in tax laws are only about different ways to misapply taxation. The problem is that the IRS has the backing of Congress because they want to take all the money possible from people and the backing of the DOJ which works for the president, who also wants to take all the money possible AND the backing of the Courts who are paid by the government and for whom there is no downside to perpetuating the fraud. These courts do not recognize key Supreme Court rulings which they are bound to follow by precedent rules. The latter day Supreme Court also plays the game by refusing to hear any cases from lower courts that would require it to rule on basic issues which have already been resolved by earlier Supreme Courts and become stare decisis.

Have we forgotten the basics of taxation?
An income tax is a tax on specified taxable ACTIVITY, a PRIVILEGE granted by
the government. (Rights granted by the Creator cannot be taxed as
"privilege").Income derived from "rental property" would be taxed under a
direct tax, not under an income tax. Unless the entity is a corporation. But
that also can be debated until the cows come home. ALWAYS CONSIDER the
SOURCE of the income! The point of this post is, let us not forget the
basics of taxation and confuse those who may be new to the group or just
getting their hands wet in trying to keep what is rightfully and lawfully
theirs from being confiscated by the Infernal Revenue Service. Income
tax- A tax on specified taxable ACTIVITY. Direct tax- A tax on property
and income derived from property, or a capitation.

John Hill

Quotations form Bob s post: The definitions given below by John Hill are incorrect. It may be inferred that income tax is POSSIBLY a tax on an activity

Message 8 of 9
, Oct 4, 2010

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Quotations form Bob's post:

"The definitions given below by John Hill are
incorrect. It may be inferred that income tax is POSSIBLY a tax on an
activity because the Supreme Court ruled that it is an EXCISE. An excise
can be applied to an ACTIVITY, an EVENT or to a PRIVILEGE.

About the
only thing the 16th Amendment DID do was to allow taxation of income without
regard to the source. Therefore income derived from rental of real
estate is constitutionally taxable by an income tax. (The reason the
16th Amendment came about in the first place was to keep income from rental of
real estate being considered a direct tax. See Pollock v.
Farmers' Loan & Trust Co.,157 US 429 (1895))"

The Pollock case was considering an
"income tax law" written by Congress. This income tax law was to be imposed
also upon the common US citizen. Here are excerpts from the decision.

"...Ordinarily, all
taxes paid primarily by persons who can shift the burden upon someone
else, or who are under no legal compulsion to pay them, are considered indirect taxes

; but a tax upon property
holders in respect of their estates, whether real or personal, or of the income yielded by such
estates, and the payment of which cannot be avoided, are
direct taxes ..."

and;

 it is apparent
(1) that the distinction between direct and indirect taxation was well
understood by the framers of the constitution and those who adopted it; (2)
that, under the state system of taxation, all taxes onreal estate or personal property or the
rents or income thereof were regarded as direct taxes; Pollock v. Farmers Loan & Trust
Co., 157 U.S. 429,
574 (1895)

and;

... A tax upon one's whole income is a tax
upon the annual receipts from his whole property, and as such falls within the
same class as a tax upon that property, and is a direct tax, in the meaning of
the Constitution.... 

We
are of opinion that the law in
question, so far as it levies a tax on the rents or income of real estate, is
in violation of the constitution, and is invalid. Pollock v. Farmers Loan & Trust
Co., 157U.S. 429,
583 (1895)

and;

...We have unanimously held in this case
that, so far as this law operates on the receipts from municipal bonds , it cannot be sustained, because it
is a tax on the powers of the States, and on their instrumentalities to borrow
money, and consequently repugnant to
the Constitution. ...it follows that, if the revenue from municipal bonds
cannot be taxed because the source cannot be, the same rule applies to revenue from any
other source not subject to the tax; and the lack of power to levy any but an
apportioned tax on real and personal property equally exists as to the revenue
therefrom. Admitting that this act taxes the income of property
irrespective of its source, still we cannot doubt that such a tax is necessarily a direct tax
in the meaning of the Constitution. In
England, we do not understand that an income tax
has ever been regarded as other than a direct tax. In Dowell's History of
Taxation and Taxes in England, given, and an income tax is invariably classified as
a direct tax.Pollock v. Farmers Loan & Trust Co., 157
U.S. 429, 586 (1895)

and, from the supporting opinion of
Justice Fields in this case:

I am of opinion that the whole law of
1894 should be declared void, and without any binding force,-that part
which relates to the tax on the rents,
profits, or income from real estate, that is, so much as constitutes part
of the direct tax, because not imposed
by the rule of apportionment according to the representation of the
states, as prescribed by the
constitution; and that part which imposes a tax upon the bonds and
securities of the several states, and upon the bonds and securities of their
municipal bodies, and upon on the salaries of judges of the courts of the
United States, as being beyond the
power of congress; and that part which lays duties, imposts, and excises,as void in not providing for the
uniformity required by the constitution in such casesPollock v. Farmers Loan & Trust
Co., 157 U.S. 429, 607 (1895)

It appears to me that the court is clear that a tax on real
property, and income derived there from, falls into the category of "direct
taxation." If you continue with further research into this case, you should
find that the Pollock case is very firm on "considering the source" of the
income. The reason for this is simply because the Constitution demands the
source to be considered. The Sixteenth Amendment surely does say that Congress
has the power to lay and collect taxes on income from whatever source derived,
without considering apportionment. In other words, Congress has the power to
do such under an "INDIRECT TAX." Keep in mind that the sixteenth amend. does
not say WHO or WHAT the recipient of the tax is! Pollock clarified that if the
recipient of the tax is a common citizen, then the common citizen cannot be
taxed on his income from rental property, under an income tax (indirect tax).
That is why the Pollock court struck down only the section of the INCOME tax
they were considering. That section being a tax on income from property, upon
the common man, which WAS NOT APPORTIONED according to the precepts of the
Constitution. The rest of the income tax law of 1895 that was upheld
applied only to those that derived special privilege form the state. In other
words, the court clarified that the owning of property by the common man is a
right granted by the very nature of things and that that income cannot be
taxed under an "INCOME TAX." Again in other words, the owning of property
by the common man, and income derived there from cannot be taxed as
a "privilege" under an "INCOME TAX". IT IS A RIGHT, NOT A PRIVILEGE!
AM-N

BOB GREGORY

*John Hill and I are in agreement on this, appearances to the contrary. The drafters of the 16th Amendment were crafty in the way they made the amendment

Message 9 of 9
, Oct 4, 2010

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John Hill and I are in agreement on this, appearances to the contrary.

The drafters of the 16th Amendment were crafty in the way they made the amendment intentionally vague. To this day, even the IRS cites the 16th Amendment as providing the basis for the income tax, though it does not. As John points out, the Pollock court ruled or commented that "...a tax upon property
holders in respect of their estates, whether real or personal, or of the income yielded by such
estates, and the payment of which cannot be avoided, are
direct taxes ..." Therefore an income tax on an individual is a direct tax and may not be imposed by the federal government without apportionment.

So what could the Supreme Court do about this? It made a series of determinations to the effect that:

The 16th Amendment gave Congress no power of taxation that it did not previously have. BRUSHABER v UNION PACIFIC R. CO., 240 US 1 (1916), PECK v LOWE, 247 US 165 (1918)

Nor did it extend taxation to any new subjects of taxation. BOWERS v. KERBAUGH-EMPIRE CO., 271 U.S. 170, 174 (1926)

That, in the corporation tax act of 1909 (passed before the 16th Amendment but in contemplation of it) the tax was not on income but on the privilege of being a corporation (only a federal corporation, but that has been corrupted). U S v. WHITRIDGE, 231 U.S. 144, 147 (1913)

The the INCOME of the corporation was used as a measure to determine the amount of tax owed. STRATTON’S INDEPENDENCE, LTD. v HOWBERT, 231 US 399 (1913)

That the term INCOME in all subsequent income tax acts has the same meaning as that determined with regard to the 1909 corporation tax. MERCHANTS’ LOAN & TRUST CO. v SMIETANKA, 255 US 509, 519 (1921)

That Congress by legislation may not change the meaning of the term Income. EISNER v MACOMBER, 252 US 189, 206 (1920)

That "Direct Taxes bear upon persons, upon possession and the enjoyment of rights; Indirect Taxes are levied upon the happening of an event." Knowlton v. Moore, 178 US 41, 47 (1900).

That “The common business and callings of life, the ordinary trades and pursuits, which are innocuous in themselves, and have been followed in all communities from time immemorial, must therefore be free in this country to all alike upon the same conditions..." Butcher's Union Co. v. Cresent City Co., 111 US 746 (1884)

That “A state may not impose a charge for the enjoyment of a right granted by the Federal Constitution.” MURDOCK v. COMMONWEALTH OF PENNSYLVANIA, 319 US 105, at 113; 63 S Ct at 875; 87 L Ed at 1298 (1943).

That “Nothing can be clearer than that what the constitution intended to guard against was the exercise by the general government of the power of directly taxing persons and property within any state through a majority made up from the other states.” Pollock vs. Farmers’ Loan and Trust Co., 157 US 429, 582 (1895)

That under the 16th Amendment the Congress cannot define and tax as income anything that that was not previously taxable as income. TAFT v. BOWERS, 278 U.S. 470, 481 (1929)

That "The Treasury cannot by interpretive regulation make income of that which is not income within the meaning of the revenue acts of Congress, nor can Congress, without apportionment, tax that which is not income within the meaning of the 16th Amendment." Helvering v. Edison Brothers' Stores 8 Cir. 133 F2d 575 (1943)

And the Arkansas Supreme Court ruled that "...the Legislature has no power to declare as a privilege and tax for revenue purposes occupations that are of common right, but it does have the power to declare as privileges and tax as such for state revenue purposes those pursuits and occupations that are not matters of common right..." Sims v. Ahrens, 167 Ark. 557, 271 S.W. 720, 733 (1925)

An income tax is an EXCISE when it is applied to a privilege, but when it is applied to a person and his property of any kind, including earnings, it is a DIRECT tax and thus unconstitutional unless apportioned.

An indirect tax is one which can be avoided. The only way to avoid income tax as administered by the IRS is to have no earnings (or to have earnings below a stated threshold level). About 46% of workers in the U.S. fall in this category. But that was not the intention of the Supreme Court in ruling that people have a right to their own labor.

The country was able to operate very successfully for 129 years without using an income tax (actually much longer, up until 1939 in practical terms). The income tax and its maladministration is a mechanism for requiring the people to pay the huge taxes which come about in the form of debt to the Federal Reserve and in the form of inflation caused by the Federal Reserve through fiat currency.

The problem with the income tax as currently administered by the IRS and backed by the DOJ and the courts is NOT with the LAW, which makes it clear that an income tax on a private individual is a direct tax which must be apportioned, with with maladministration, collusion and enforcement through fear.

The question then becomes what the people can do about it? The answer lies basically in the Declaration of Independence, which is equally applicable to the present government of the United States as it was to the government of Britain under George III. Thomas Jefferson, John Adams and others feared and forecast that the government would become oppressive. They were "no guts, no glory" guys. If the American people of today do not muster the guts to just refuse en masse to file income tax returns and refuse to pay income taxes they do not owe, then they will continue to suffer from more and more repressive taxation. It cannot be done by a few brave individuals because the government has the power to crush them one by one. It must be done by multiple millions of people who pledge their "lives, their f-rtunes and their s-cred honor" to attack the problem and win.

It appears to me that the court is clear that a tax on real
property, and income derived there from, falls into the category of "direct
taxation." If you continue with further research into this case, you should
find that the Pollock case is very firm on "considering the source" of the
income. The reason for this is simply because the Constitution demands the
source to be considered. The Sixteenth Amendment surely does say that Congress
has the power to lay and collect taxes on income from whatever source derived,
without considering apportionment. In other words, Congress has the power to
do such under an "INDIRECT TAX." Keep in mind that the sixteenth amend. does
not say WHO or WHAT the recipient of the tax is! Pollock clarified that if the
recipient of the tax is a common citizen, then the common citizen cannot be
taxed on his income from rental property, under an income tax (indirect tax).
That is why the Pollock court struck down only the section of the INCOME tax
they were considering. That section being a tax on income from property, upon
the common man, which WAS NOT APPORTIONED according to the precepts of the
Constitution. The rest of the income tax law of 1895 that was upheld
applied only to those that derived special privilege form the state. In other
words, the court clarified that the owning of property by the common man is a
right granted by the very nature of things and that that income cannot be
taxed under an "INCOME TAX." Again in other words, the owning of property
by the common man, and income derived there from cannot be taxed as
a "privilege" under an "INCOME TAX". IT IS A RIGHT, NOT A PRIVILEGE!
AM-N

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